If you’ve recently paid for a coffee at a java joint, you might have been prompted by a point-of-sale payment device to add a tip of 15 percent. Or you might have been asked for a more generous 18 percent. A pushing-it 20 percent. A borderline-offensive 25 percent. For a cup of coffee that runs you about $3, and which someone poured from a carafe, that can seem a big ask.
You might have also been swept by an overwhelming sense of annoyance, wondering when the tipping protocols changed, why, and to what end. Recent years have witnessed the twin phenomena of “tipflation” (a higher percentage ask for tips) and “tip creep” (the extension of the practice into new industries). A gratuity economy once limited to businesses like hair salons, hotels, restaurants, bars, and taxis now includes dry cleaners and auto mechanics. Some places are even embedding the option into self-checkout kiosks—situations, in other words, where a human worker plays no role at all.
Frustration over new tipping expectations also stems from the added pressure on consumers, especially as dining out becomes more expensive and living costs climb. Last year, an online survey by pollster Angus Reid Institute found 83 percent of Canadians believed “too many places” were asking for tips.
The precise origins of tipping are unclear, but as far back as the Middle Ages, wealthy travellers staying in a friend’s home would leave money for household staff—an act that revealed the imbalance of power aristocrats held over servants, reflecting the era’s noblesse oblige. As North America imported the practice from Europe in the nineteenth century, it shaped class politics, cementing a transactional bond between the person serving and the one served. Tipping rewarded the effort of going above and beyond. It also worked as a kind of oversight. Tying earnings to customer satisfaction was intended to spur better performance absent direct supervision.
But that link is fraying. New practices not only weaken tipping’s traditional role as a feedback mechanism but they also appear to have an obverse effect on the level of care provided. As per Angus Reid, a mere 13 percent of Canadians agreed that service “has generally improved.”
The trend toward tip ubiquity and growing rates is driven in part by technological developments that have changed how we pay for goods and services. Previously, you might have been asked to enter the amount into a machine yourself by pressing the keys on the pad or even write down the tip amount on the receipt. Point-of-sale machines, like those offered by Clover or Toast, make it easy to set a pre-programmed range of tips—which makes it easier for establishments to set a rate for tips, prompt the buyer, nudge them toward a middle rate that’s higher than normal, and then collect the funds.
Those who tip higher amounts might be inclined to credit their own benevolence for doing so, but human psychology, being what it is, tells another story. You can’t underestimate the effect of social embarrassment. Who wants to be a cheapskate and choose the lowest amount, especially if the server or cashier is standing beside or staring at them? I certainly don’t. But I also believe that workers deserve a fair wage one way or another, and I tend toward 18 percent in most situations—or higher if the percentage would otherwise yield a pittance.
Pre-set tipping amounts also serve as a psychological anchor for customers—setting an initial, expected, often inflated, range of pricing—that tends to drive tipped amounts higher than what someone would pay without the nudge. With a point-of-sale machine that shows an anchored range of 15 to 20 percent, with 18 percent in the middle, there’s a good chance you’re drawn to the 18 percent. You can test this effect for yourself the next time. Before you leave home, ask yourself how much you would like to tip when you’re asked. And once you’re prompted to tip, pay attention to how the options shape your decision.
Technology, on its own, doesn’t account for the turn in tips. Writing in Vox in 2021, Terry Nguyen argued the pandemic had changed tip culture in the US. The risks essential workers had taken—exposing themselves to the virus and getting sick or dying—to serve customers and keep the wheels of commerce moving called for recognition, not maudlin social media posts.
The same effect held in Canada. But servers in Canada weren’t rolling in piles of cash before the pandemic, and they aren’t now either. Outside Quebec, no province has a tipped minimum wage—which means workers aren’t surviving on tips alone in most of the country. The median individual income, after tax, was around $43,000 in 2022. The median wage for a server in Canada is $18 an hour—which, if they’re working full time, puts them in the low to mid $30,000 range. That’s not enough money to survive on. This means, as things stand, tips are a necessity for workers, who otherwise would struggle even more than they do now and who are left dealing with customers in the food service industry—which is no packed picnic.
But pressing Canadians to tip more, and in more places, might not be the way to raise wages, particularly if higher tips and the growth of tippable work lead to a backlash and cutting back on how much people tip and when. A recent Lightspeed Commerce survey finds that Canadians are now doing just that, with a quarter reducing their tips.
Marc S. Mentzer, a professor of human resources and organizational behaviour at the University of Saskatchewan, says the rise of the tip range has been an “unquestionably deliberate” choice, since restaurants—or any shop owner—can use point-of-sale terminals to set defaults as they wish. And higher tips serve owners as well as servers. “The restaurant owners are benefiting,” says Mentzer, “because as tips go up, both as a percentage and as absolute dollars, there’s less pressure on the employer to raise the server’s wage.”
Mentzer argues tips are “an intrinsically unfair way of determining an employee’s pay.” Tipping isn’t an effective way of recognizing good or bad service either, because there are so many variables that can affect the tip percentage. For example: “Younger servers get better tips than older servers,” Mentzer notes. “Women servers get higher tips than male servers. Things like physical attractiveness of the server come into play. Sometimes servers feel they have to put up with harassing comments from customers because they want to get a good tip.”
Angus Reid’s 2023 survey found that 59 percent of respondents favoured getting rid of tipping and moving to a service-included model, like what France and Denmark use—with support for a switch up nineteen points from 2016. But Mentzer doesn’t think it’ll happen. He points out restaurants don’t want to raise menu prices and “scare customers away.” Moreover, he says, “customers like the illusion that they have some power over the server, and servers like the belief that they are to some extent in control of their own income.”
While there may be a growing backlash, the tip-for-service model is entrenched. “I don’t think tipping is ever going to go away,” says Mentzer. We may simply be seeing a new normal emerge. Our tipping culture may be shifting, as the higher rates and prevalence become normalized through widely adopted technological changes, psychological nudges, and the recognition that many who are tipped don’t make enough to survive on otherwise.
At the same time, however, tippers, who are being asked to give more while employers are left off the hook, are often facing their own struggles, bills, debts, and sundry financial pressures. This dynamic is setting up a class struggle among those who are, in fact, in the same small boat, while those in the yachts sail on.
